Misclassification and Lack of Documentation for Property, Plant and Equipment Accounts
National Housing Authority · 2024
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What Happened?
Category: Financial ManagementIssue: Non-complianceNHA recorded almost P895 million in property and equipment that either don't exist, aren't owned by NHA, or are not properly documented. This makes the financial statements inaccurate and breaks accounting rules.
Why It Matters
Recommended Actions
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Original Audit Finding Excerpt
"The misclassification, doubtful existence, and lack of proper documentation for Land, Other Land Improvements, Infrastructure Assets, and Buildings and Other Structures recorded under the PE accounts totaling P894.918 million materially distort the fair presentation of the NHA’s FS. These deficiencies resulted in an overstatement of asset balances, contrary to the principles of faithful representation under IPSAS 1, which require that financial information be complete, neutral, and free from material error, and violate the recognition criteria of IPSAS 17, which only permits recognition of Property, Plant, and Equipment that are expected to provide future economic benefits or service potential and whose cost can be measured reliably."